Area farmers likely won't abandon CRP contracts

RICHARD PORTER Herald Staff Writer

Published 7:00 pm, Tuesday, July 29, 2008

By RICHARD PORTER

Herald Agriculture Editor

U.S. Secretary of Agriculture Ed Schafer has announced that the federal government will not allow penalty-free withdrawal from existing contracts from the Conservation Reserve Program (see related story, Pg. 12).

However, according to Jack London, executive director for the Hale County Farm Service Agency, that decision will have little impact locally.

The announcement was necessary because earlier in the year livestock and bakery industry groups had asked the government to allow farmers to end their contracts early so producers could bring fields back into production and grow more grain crops.

The concern was that increased demand for corn, in particular, was driving up food and feed prices to the point that those industries were being impacted negatively.

According to the Associated Press, the program currently has 34.7 million acres enrolled.

The object of CRP enrollments is to encourage producers to remove marginal land from production and put it into conservation. Much of the land has become prime habitat for wildlife.

As London explained, that is exactly what has happened in Hale County and it is precisely why few farmers in the county have considered early withdrawal.

London said that the government built in a pretty stiff penalty as negative incentive for early withdrawal.

"If they decide to pull it out they can, but they have to pay back all payments (from the program), pay back all cost shares and pay interest," he said.

The problem is, as corn prices skyrocketed through the early part of the year, bringing other grain prices up with them, and concerns over supply grew, farmers in some parts of the country realized they possibly could absorb that penalty and still make money.

The Associated Press pointed out that so far 288,726 acres have been pulled out early.

Not in Hale County.

According to FSA data, currently there are 1,292 active CRP contracts representing 131,531.3 acres. Annual payments in the county equal $5 million.

London said that in most instances the land in Hale County that was put into the program is not capable of producing corn because there simply isn't enough water. At the same time, he continued, the cost of irrigation and fertilizer both have risen precipitously over the past year.

"I don't have a lot of people that want to break it out because of those reasons," London said.